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Turkish President Recep Tayyip Erdogan unfortunately is a man of his word.Erdogan has also given himself the power to name the central bank governor, and thus the ability to entrench his unorthodox view that higher interest rates cause faster inflation.The lira weakened versus the dollar, 10-year yields soared to over 17 percent, credit default swaps widened and stocks fell, with a 3.7 percent drop in the banking industry leading the declines.For investors, the best course is almost certainly to stay away. The normal events that investors could look toward for reassurance look hopeless.It is difficult to see Erdogan approving any increase, and demanding a cut can't be ruled out. Inflation soared to 15.4 percent in June, and government policies, plus a weaker currency, look primed to push this higher. The fate of Turkey is entirely in Erdogan's hands.
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